FitzPatrick Nuclear Plant Saved by Exelon-Entergy Deal

Exelon Generation has agreed to acquire the James A. FitzPatrick Nuclear Power Plant from Entergy Corp. in a deal worth $110 million.

Entergy had slated the 838-MW single-unit facility located in Scriba, N.Y., for closure by January 2017 for economic reasons, but the change in ownership will allow the plant to remain in operation. Exelon said it has committed to refueling FitzPatrick in January 2017, and it does not anticipate any immediate change to staffing levels at the plant, which employs about 600 people.

“We are pleased to have reached an agreement for the continued operation of FitzPatrick,” Exelon President and CEO Chris Crane said. “We look forward to bringing FitzPatrick’s highly-skilled team of professionals into the Exelon Generation nuclear program, and to continue delivering to New York the environmental, economic and grid reliability benefits of this important energy asset.”

Fast-Paced Negotiation

In July, the two companies announced that they were in discussions about a possible sale of the plant. The news followed the New York Department of Public Service’s release of a proposal to subsidize zero-emissions attributes of upstate nuclear power plants. Although Entergy said that a subsidy would not alter its decision to close FitzPatrick, when the New York State Public Service Commission adopted the Clean Energy Standard (CES) on August 1, Crane said Exelon would “immediately invest hundreds of millions of dollars” into its upstate plants.

Exelon owns and operates the nation’s largest fleet of nuclear reactors, including two other stations in upstate New York (Nine Mile Point and R.E. Ginna). The company said that without the CES those plants would also have been at risk of closure, but it now expects to invest between $400 million and 500 million in its upstate plants by spring.

Governor Praised

“We thank Governor Cuomo and his administration for their part in facilitating an agreement to save FitzPatrick,” Crane said. “His leadership on the CES and preserving zero-emissions assets has truly positioned New York as the nation’s leader in clean energy.”

Transaction closure is dependent upon regulatory review and approval by state and federal agencies, including the U.S. Department of Justice, the Nuclear Regulatory Commission, the Federal Energy Regulatory Commission, and the New York State Public Service Commission. If approved, Entergy would transfer FitzPatrick’s operating license to Exelon. FitzPatrick’s decommissioning trust fund and associated liability would also end up in Exelon’s hands. Barring complications, the companies plan to close the deal in the second quarter 2017.

“I would like specifically to thank our employees who have continued to operate this plant safely and reliably, despite the uncertainty they have faced about a potential shutdown,” said Entergy Chairman and CEO Leo Denault. “The pending sale of FitzPatrick is in the best interests of all of our stakeholders: employees, owners, customers and communities, including New Yorkers who will benefit from the plant’s continued clean, safe and reliable energy production.”

Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)